Correlation Between Matson Money and Multi-asset Growth
Can any of the company-specific risk be diversified away by investing in both Matson Money and Multi-asset Growth at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Matson Money and Multi-asset Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Fixed and Multi Asset Growth Strategy, you can compare the effects of market volatilities on Matson Money and Multi-asset Growth and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Matson Money with a short position of Multi-asset Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Multi-asset Growth.
Diversification Opportunities for Matson Money and Multi-asset Growth
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MATSON and Multi-asset is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Fixed and Multi Asset Growth Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Asset Growth and Matson Money is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Matson Money Fixed are associated (or correlated) with Multi-asset Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Asset Growth has no effect on the direction of Matson Money i.e., Matson Money and Multi-asset Growth go up and down completely randomly.
Pair Corralation between Matson Money and Multi-asset Growth
Assuming the 90 days horizon Matson Money Fixed is expected to generate 0.24 times more return on investment than Multi-asset Growth. However, Matson Money Fixed is 4.08 times less risky than Multi-asset Growth. It trades about 0.1 of its potential returns per unit of risk. Multi Asset Growth Strategy is currently generating about 0.0 per unit of risk. If you would invest 2,454 in Matson Money Fixed on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Matson Money Fixed or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Fixed vs. Multi Asset Growth Strategy
Performance |
| Timeline |
| Matson Money Fixed |
| Multi Asset Growth |
Matson Money and Multi-asset Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Multi-asset Growth
The main advantage of trading using opposite Matson Money and Multi-asset Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Multi-asset Growth can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Multi-asset Growth will offset losses from the drop in Multi-asset Growth's long position.| Matson Money vs. Pace High Yield | Matson Money vs. Pace High Yield | Matson Money vs. Pimco High Yield | Matson Money vs. Blackrock High Yield |
| Multi-asset Growth vs. Nasdaq 100 2x Strategy | Multi-asset Growth vs. Shelton Emerging Markets | Multi-asset Growth vs. Angel Oak Multi Strategy | Multi-asset Growth vs. Barings Emerging Markets |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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